In employment law, few areas cause as much administrative friction as the overlap between long-term sickness absence and statutory annual leave. A scenario crossing my desk with surprising frequency involves a long-term sick employee - perhaps on half-pay or nil pay with Statutory Sick Pay (SSP) - who requests to take a week of annual leave.

The immediate reaction from HR or payroll may be a reflex 'refusal': “You cannot be on holiday if you are signed off sick. We need a fit note, not a holiday request.” While intuitively logical to the non-lawyer, this administrative rigidity is fraught with legal risk.

The "Stringer" 'Principle': Two Sides of the Same Coin

The foundational misunderstanding often lies in the belief that sickness and holiday are mutually exclusive statuses. The foundational misunderstanding often lies in the belief that sickness and holiday are mutually exclusive statuses: they are not. Since the seminal decision in Stringer and others v Revenue and Customs Commissioners [2009] ICR 932, it has been established that workers on long-term sick leave continue to accrue statutory annual leave.

Crucially, the Grand Chamber of the Court of Justice ruled that the Directive treats the entitlement to leave and the payment on that account as being two aspects of a single 'right':

"Directive 2003/88 treats entitlement to annual leave and to a payment on that account as being two aspects of a single right.". Stringer, Paragraph 60

'Codification': The 2024 Amendments

Effective 1 January 2024, the Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023 amended the Working Time Regulations 1998 (WTR) to explicitly codify these principles. Regulation 13(15) now expressly states that where a worker is unable to take annual leave due to sickness, they are entitled to carry that leave forward into the following leave year.

Relying on NHS Leeds v Larner [2012] EWCA Civ 1034, this carry-over is automatic. If sickness prevents a worker from taking leave, they do not need to submit a formal request to carry it over; the right is preserved by operation of law.

The Counter-Notice 'Caveat': Regulation 15

Employers often clutch at Regulation 15 of the WTR as a shield to refuse specific dates. However, because Regulation 13(15) guarantees the right to carry over leave lost due to sickness, refusing a request merely defers the liability. The employer is simply pushing a financial snowball down the hill.

The "Normal Remuneration" Trap

In British Gas Trading Ltd v Lock [2017] ICR 1, the Court of Appeal affirmed that holiday pay must reflect *normal remuneration*,including commission and regular overtime. Preventing a sick worker from swapping SSP for full Holiday Pay subjects them to a financial detriment.

When Administration Becomes Discrimination

This "computer says no" approach is high-risk under the Equality Act 2010. If the sickness arises from a disability, refusing a request to access full pay via annual leave may constitute discrimination arising from disability (Section 15) or a failure to make reasonable adjustments (Section 20).

Practical takeaways

  1. Answer the reflex refusal at source: nothing makes sickness and annual leave mutually exclusive statuses, and Stringer treats entitlement to leave and the payment for it as two aspects of a single right.
  2. Do not chase the worker for a carry-over request. Under regulation 13(15) WTR and NHS Leeds v Larner, leave lost to sickness carries forward by operation of law.
  3. Price the deferral before advising an employer to refuse dates under regulation 15. The entitlement survives the refusal: all the employer has done is push the cost into the next leave year.
  4. Work out what normal remuneration means for this worker before quantifying the loss. British Gas Trading Ltd v Lock brings commission and regular overtime into holiday pay, so the gap between SSP and holiday pay is wider than basic pay suggests.
  5. Where the absence is disability-related, treat the payroll refusal itself as the act complained of: blocking access to full pay through annual leave is a candidate for discrimination arising from disability under section 15 and a failure to make reasonable adjustments under section 20.